Paul Krugman says worst of economic crisis over

SEOUL, May 19 (Yonhap) -- Nobel prize laureate Paul Krugman said Tuesday the
worst phase of the global economic crisis is over but massive lingering debts
make any early recovery unlikely.
"I share the optimism that the worst is maybe over," said Paul Krugman, who was
awarded the Nobel Memorial Prize in Economic Sciences in 2008, in a speech to an
international forum held here.
Although various indicators suggest that growth worldwide continues to slow, they
also indicate that the pace of such decline has eased, said the renowned
professor of economics at Princeton University.
He added that the absence of credit is fading, bolstered by large unconventional
interventions by the U.S. and other central banks to limit the stress on
financial markets.
Krugman, however, warned that despite stabilizing financial markets, talk of any
recovery is premature due to massive over-leveraging of banks and excessive debt
not just in the financial system but also among households and much of the world.

"We are left with all of that excessive debt and will have an extended process of
global de-leveraging taking place," he said, noting that "by no means are we at
the end of the story."
pbr@yna.co.kr
(END)